Loans

3 Months Ended

Sep. 30, 2011

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

Note 3 – Loans

Major classifications of loans were as follows:

	September 30,			June 30,
	2011			2011
Commercial	$	19,034		$	19,297
Commercial real estate:
Construction		2,379			1,057
Other		100,361			97,403
1 – 4 Family residential real estate:
Owner occupied		33,251			34,488
Non-owner occupied		18,505			19,098
Construction		139			597
Consumer		6,498			5,874
Subtotal		180,167			177,814
Less: Net deferred loan fees		(266	)		(263	)
Allowance for loan losses		(2,087	)		(2,101	)
Net Loans	$	177,814		$	175,450

The following table presents the activity in the allowance for loan losses by portfolio segment for the three months ending September 30, 2011:

				Commercial		Residential
				Real		Real
	Commercial			Estate		Estate			Consumer			Total

Allowance for loan losses:
Beginning balance	$	179		$	882	$	947		$	93		$	2,101
Provision for loan losses		(82	)		172		(33	)		35			92
Loans charged-off		—			—		(69	)		(50	)		(119	)
Recoveries		—			—		—			13			13

Total ending allowance balance	$	97		$	1,054	$	845		$	91		$	2,087

A summary of activity in the allowance for loan losses for the three months ended September 30, 2010, was as follows:

Beginning of period	$	2,276
Provision		102
Charge-offs		(41	)
Recoveries		20
Total ending allowance balance	$	2,357

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of September 30, 2011. Included in the recorded investment in loans is $(266) of net deferred loan fess and $459 of accrued interest receivable.

					1-4 Family
			Commercial		Residential
			Real		Real
	Commercial		Estate		Estate		Consumer		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	10	$	107	$	249	$	—	$	366
Collectively evaluated for impairment		87		947		596		91		1,721

Total ending allowance balance	$	97	$	1,054	$	845	$	91	$	2,087

Recorded investment in loans:
Loans individually evaluated for impairment	$	77	$	1,395	$	1,320	$	—	$	2,792
Loans collectively evaluated for impairment		19,010		101,359		50,711		6,488		177,568

Total ending loans balance	$	19,087	$	102,754	$	52,031	$	6,488	$	180,360

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of June 30, 2011. Included in the recorded investment in loans is $(263) of net deferred loan fees and $472 of accrued interest receivable.

					1-4 Family
			Commercial		Residential
			Real		Real
	Commercial		Estate		Estate		Consumer		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	13	$	126	$	293	$	—	$	432
Collectively evaluated for impairment		166		756		654		93		1,669

Total ending allowance balance	$	179	$	882	$	947	$	93	$	2,101

Recorded investment in loans:
Loans individually evaluated for impairment	$	82	$	1,405	$	1,042	$	—	$	2,529
Loans collectively evaluated for impairment		19,254		97,093		53,279		5,868		175,494

Total ending loans balance	$	19,336	$	98,498	$	54,321	$	5,868	$	178,023

The following table presents information related to loans individually evaluated for impairment by class of loans as of and for the three months ended September 30, 2011:

	Unpaid				Allowance for		Average		Interest		Cash Basis
	Principal		Recorded		Loan Losses		Recorded		Income		Interest
	Balance		Investment		Allocated		Investment		Recognized		Recognized

With no related allowance recorded:
Commercial	$	16	$	16	$	—	$	17	$	—	$	—
Commercial real estate:
Other		635		634		—		635		3		3
1-4 Family residential real estate:
Owner occupied		97		97		—		97		2		2
Non-owner occupied		64		65		—		43		—		—
With an allowance recorded:
Commercial		62		61		10		63		—		—
Commercial real estate:
Other		762		761		107		763		5		5
1-4 Family residential real estate:
Owner occupied		220		218		14		218		2		2
Non-owner occupied		940		940		235		871		—		—
Total	$	2,796	$	2,792	$	366	$	2,707	$	12	$	12

The following table presents information related to loans individually evaluated for impairment by class of loans as of June 30, 2011 and for the three months ended September 30, 2010:

	As of June 30, 2011						Three Months ended September 30, 2010
	Unpaid				Allowance for		Average		Interest		Cash Basis
	Principal		Recorded		Loan Losses		Recorded		Income		Interest
	Balance		Investment		Allocated		Investment		Recognized		Recognized

With no related allowance recorded:
Commercial	$	18	$	18	$	—	$	23	$	—	$	—
Commercial real estate:
Other		413		412		—		493		—		—
With an allowance recorded:
Commercial		64		64		13		30		—		—
Commercial real estate:
Other		997		993		126		1,263		3		18
1-4 Family residential real estate:
Owner occupied		320		319		3		222		2		—
Non-owner occupied		724		723		290		775		—		—
Total	$	2,536	$	2,529	$	432	$	2,806	$	5	$	18

The following table presents the recorded investment in non-accrual and loans past due over 90 days still on accrual by class of loans as of September 30, 2011 and June 30, 2011:

	September 30, 2011				June 30, 2011
			Loans Past Due				Loans Past Due
			Over 90 Days				Over 90 Days
			Still				Still
	Non-accrual		Accruing		Non-accrual		Accruing
Commercial	$	62	$	—	$	64	$	—
Commercial real estate:
Other		950		—		754		—
1 – 4 Family residential:
Owner occupied		358		—		219		—
Non-owner occupied		649		—		723		—
Consumer		—		—		—		—
Total	$	2,019	$	—	$	1,760	$	—

Non-accrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.

The following table presents the aging of the recorded investment in past due loans as of September 30, 2011 by class of loans:

	Days Past Due
					90 Days or
	30 - 59		60 – 89		Greater &		Total		Loans Not
	Days		Days		Non-accrual		Past Due		Past Due		Total
Commercial	$	16	$	—	$	37	$	53	$	19,034	$	19,087
Commercial real estate:
Construction		—		—		—		—		2,378		2,378
Other		112		—		651		763		99,613		100,376
1-4 Family residential:
Owner occupied		—		—		211		211		33,172		33,383
Non-owner occupied		26		—		—		26		18,482		18,508
Construction		—		—		—		—		140		140
Consumer		28		—		—		28		6,460		6,488
Total	$	182	$	—	$	899	$	1,081	$	179,279	$	180,360

The above table of past due loans includes the recorded investment in non-accrual loans of $1,120 in the loans not past due category.

The following table presents the aging of the recorded investment in past due loans as of June 30, 2011 by class of loans:

	Days Past Due
					90 Days or
	30 - 59		60 - 89		Greater &		Total		Loans Not
	Days		Days		Non-accrual		Past Due		Past Due		Total
Commercial	$	—	$	1	$	—	$	1	$	19,335	$	19,336
Commercial real estate:
Construction		—		—		—		—		1,053		1,053
Other		—		242		412		654		96,791		97,445
1-4 Family residential:
Owner occupied		—		167		23		190		34,438		34,628
Non-owner occupied		—		44		175		219		18,877		19,096
Construction		—		—		—		—		597		597
Consumer		26		—		—		26		5,842		5,868
Total	$	26	$	454	$	610	$	1,090	$	176,933	$	178,023

The above table of past due loans includes the recorded investment in non-accrual loans of $410 in the 60 – 89 days past due category and $740 in the loans not past due category.

Troubled Debt Restructurings:

The Corporation allocated $279 and $229 of specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of September 30, 2011 and June 30, 2011. As of September 30, 2011 and June 30, 2011, the Corporation had not committed to lend any additional amounts to customers with outstanding loans that are classified as troubled debt restructurings.

During the period ending September 30, 2011, the terms of certain loans were modified as troubled debt restructurings. The modification of the terms of such loans included one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; a permanent reduction of the recorded investment in the loan; or a temporary reduction in the payment amount to interest only.

Modifications involving a reduction of the stated interest rate of the loan were for periods ranging from 12 months to 6.5 years. Modifications involving an extension of the maturity date were for a period of 6.5 years.

The following table presents loans by class modified as troubled debt restructurings that occurred during the period ending September 30, 2011:

			Pre-Modification		Post-Modification
	Number of		Outstanding Recorded		Outstanding Recorded
	Loans		Investment		Investment
Troubled debt restructuring:
1 – 4 Family residential:
Non-owner occupied		7	$	534	$	466

Total		7	$	534	$	466

The troubled debt restructurings described above increased the allowance for loan losses by $20 and resulted in charge offs of $63 during the period ending September 30, 2011.

Credit Quality Indicators:

The Corporation categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Corporation analyzes loans individually by classifying the loans as to credit risk. This analysis includes loans with a total outstanding loan relationship greater than $100 and non-homogeneous loans, such as commercial and commercial real estate loans. Management monitors the loans on an ongoing basis for any changes in the borrower’s ability to service their debt and affirm the risk ratings for the loans and leases in their respective portfolio on an annual basis. The Corporation uses the following definitions for risk ratings:

Special Mention. Loans classified as special mention have a potential weakness that deserves management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution's credit position at some future date.

Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. Loans listed as not rated are either less than $100 or are included in groups of homogeneous loans. Based on the most recent analysis performed, the recorded investment by risk category of loans by class of loans was as follows:

	As of September 30, 2011
			Special						Not
	Pass		Mention		Substandard		Doubtful		Rated
Commercial	$	17,966	$	775	$	56	$	77	$	213
Commercial real estate:
Construction		2,199		179		—		—		—
Other		89,028		7,220		2,218		1,395		515
1-4 Family residential real estate:
Owner occupied		4,755		370		101		315		27,842
Non-owner occupied		13,677		2,650		991		1,005		185
Construction		—		—		—		—		140
Consumer		—		—		—		—		6,488
Total	$	127,625	$	11,194	$	3,366	$	2,792	$	35,383

	As of June 30, 2011
			Special						Not
	Pass		Mention		Substandard		Doubtful		Rated
Commercial	$	17,469	$	743	$	884	$	82	$	158
Commercial real estate:
Construction		868		76		109		—		—
Other		87,857		5,624		2,055		1,405		504
1-4 Family residential real estate:
Owner occupied		5,526		305		372		319		28,106
Non-owner occupied		14,549		1,976		1,657		723		191
Construction		28		—		—		—		569
Consumer		—		—		—		—		5,868
Total	$	126,297	$	8,724	$	5,077	$	2,529	$	35,396

- Definition

The entire disclosure for claims held for amounts due a company. Examples include trade accounts receivables, notes receivables, loans receivables.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6965416&loc=d3e5066-111524

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 03
-Paragraph 7
-Article 9

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 01-6
-Paragraph 13
-Subparagraph d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section 50
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=6965416&loc=d3e5162-111524

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 3, 4
-Article 5

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(k))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.3,4)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Article 4
-Section 08
-Paragraph k

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6965416&loc=d3e5074-111524

+ Details